5 Extended Warranty Tips

Regardless of the provider you choose there are a number of things to
look for and look out for. Consumers can be overwhelmed by the dizzying
array of plans available. If you do a little homework, it is quite easy
to separate the good plans from the clunkers.

Signs of a good plan:

Corporate credit card to pay for services

Ability to choose dealership or independent repair shop

Warranty is transferable

Trip-interruption coverage

Free loaner car

BBB certified

Signs of a bad plan:

Out of pocket to cover repairs

Specific caps on repair costs

Large numbers of exclusions

Dealership pressure to purchase plan

Non-transferable

Com­pany lacking strong track record of customer satisfaction

­Most plans specify that replacement parts may be either new
or remanufactured, and that the choice of those parts is at the
discretion of the provider. Many consumers balk at this. However, you
wouldn't expect a provider to pay for a shoddy repair that they have to
fix again in several months. In the long run, they are going to use the
least-expensive part available that offers reliable service.

According to David Tryansky of 1 Source Auto Warranty, consumers should check that, "all programs are insured and
reinsured, and that the company offering the plan will continue to pay
claims for the life of the contract." This might be the most important
thing to look for in a provider. The last thing you need to do is pay
for a plan that becomes worthless if the company goes bankrupt.

If you purchase from a dealer or from a third party make sure
that you investigate the company you are purchasing from. Companies
should offer a strong retail history, adequate financial reserves, and
should be highly rated by the Better Business Bureau, Standard and
Poors, or A.M. Best.